Suddenly A Nasty Fight over Subsidies for Nukes in Europe

by Wolf Richter • Apr 14, 2012 • Comments Off on Suddenly A Nasty Fight over Subsidies for Nukes in Europe

The meltdowns at Fukushima Number 1 that have caused so much havoc have also paralyzed Japan’s nuclear power industry. The last of its 54 reactors will be taken off line in May for scheduled maintenance, but none has been restarted due to local resistance. “Deindustrialization” is gripping the power-starved country. TEPCO, owner of the Fukushima plant, is being bailed out with trillions of yen in taxpayer money, or rather in debt that Japan has to issue even as it’s sinking deeper into a fiscal quagmire. Meanwhile, new revelations seeped out about the nuclear industry’s controlling relationship with the government: conspiracies had squashed stiffer regulations. Japan Inc. at work. Five years later, the people of Fukushima paid the price.

And now, halfway around the world, in the European Union, nuclear power industries are also lining up to suck at the teat of the taxpayer, but ingeniously not taxpayers in their own countries, at least not directly, but taxpayers in other countries. Turns out, France, the UK, Poland, and the Czech Republic, which are all planning or building nuclear power plants, are pressuring the European Union to open up the spigot.

This emerged when the German daily Süddeutsche Zeitung obtained letters the four had sent to Brussels in preparation for the meeting of the European economics and energy ministers later next week. Their goal: get the EU to reclassify nuclear energy as low-emission technology, a heavily subsidized category that includes solar and wind power; it would make nuclear power eligible for the same subsidies. Their argument: Europe’s commitment to shift to low-emission power generation by 2050 would have to be “technology neutral.”

If the four countries succeed, the EU could subsidize not only construction of nuclear power plants but also the sale of their electricity to the tune of billions of euros—to be paid by all taxpayers in the EU via the EU budget, 20% of which falls upon German taxpayers. Alas, it’s precisely Germany that has decided to exit nuclear power.

After a decade of tergiversation about shifting from fossil and nuclear power to renewables, Germany reacted to the Fukushima disaster with lightning speed. Within three months, it revoked the licenses of 7 of its 17 nuclear power plants and then voted to exit nuclear power altogether by 2022, a very expensive undertaking. Hence, efforts to get German taxpayers to subsidize nuclear power in other countries aren’t going to go over very well.

France, on the other hand, is up to its neck in nuclear power: nearly 80% of its electricity production derives from it, part of which it exports to its neighbors. The government owns 84.4% of EDF, the utility in charge of the 58 reactors, and 78.9% of Areva, an industrial conglomerate focused on nuclear power. Both have run into difficulties. One of their costliest problems is the advanced EPR (European Pressurized Reactor), started in 2006, that is now mired in economic and political trouble, after huge cost overruns, technical difficulties, and endless delays. So EU subsidies would be one heck of a bailout.

The UK is planning 4 nuclear power plants, but construction hasn’t begun as no one is eager to plow billions of pounds into a technology whose future is in question. But a hefty European subsidy would change that.

“The Trojan horse of nuclear states,” is what Tobias Münchmeyer, a German energy expert at Greenpeace, called the reclassification of nuclear power. And he exhorted his government not to fall for it. It might end up shifting subsidies from sacrosanct renewable energies to nukes.

Ah yes, the ancient problem of subsidies. Bureaucrats and officials choose winners and losers and hand taxpayers the bill. In the jungle of EU regulations and subsidies, this fight could get nasty. So far, reactions have been muted. EU Energy Commissioner Günther Oettinger would listen to the positions of the member states, he said. Officials in the German government declined to comment. In France, a spokesperson for Industry Minister Eric Besson came out swinging. “There is no French initiative in this direction,” he said. Clearly, EU political maneuvering has started.

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